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CEOs of the lowest-paid workers earned 670 times their salaries last year, despite the fact that inflation wiped out their raises

McDonald’s CEO Chris Kempczinski.
McDonald’s CEO Chris Kempczinski.

Many new pandemic-era developments were made in the labor market over the last year, including skyrocketing wages, labor shortages, and the Great Resignation.

One trend has become more extreme: the CEOs of America's lowest-paying companies receive massive pay packages. At the same time, workers' daily costs increased dramatically.

According to a new report from the left-leaning Institute for Policy Studies, the pay gap between CEOs and average workers will widen even more in 2021. Top executives earned 670 times more than their employees at the lowest-paying companies, a gap that has grown since 2020, when they earned 604 times more. In fact, the CEO-to-worker pay ratio was more than 1,000-to-1 at 49 of the 300 companies studied by IPS.

The companies with the highest CEO-worker pay ratios among the 300 companies in the report are listed in the table below:

Those with the highest CEO-worker pay ratios among 300 companies in a report by the Institute for Policy Studies.

Nu Skin EnterprisesRyan Napierski$4,948,520$22422,092:1
Amazon.comAndy Jassy$212,701,169$32,8556,474:1
Abercrombie & Fitch Co.Fran Horowitz$12,851,399$3,9153,282:1
MattelYnon Kreiz$16,128,895$5,9632,705:1
Universal CorporationGeorge Freeman$5,171,861$1,9282,683:1
The GapSonia Syngal$18,260,915$7,3482,485:1
Yum China HoldingsJoey Wat$16,555,672$6,7382,457:1
ManpowerGroup Inc.Jonas Prising$18,787,835$8,0222,342:1
Skechers U.S.A.Robert Greenberg$23,977,314$10,5862,265:1
McDonald's CorporationChristopher Kempczinski$20,028,132$8,8972,251:1
The TJX CompaniesErnie Herrman$31,802,000$14,1392,249:1
Yum! BrandsDavid W. Gibbs$27,578,659$13,0822,108:1
Table: Madison Hoff/Insider  Source: Institute for Policy Studies, "Executive Excess 2022"

High Ceo pay is not a new phenomenon. According to a report from the left-wing Economic Policy Institute, CEOs will earn 351 times more than the average worker in 2020. According to EPI, CEO compensation has increased 1,322 % from 1978 to 2020. At the same time, the average worker's pay increased by only 18% during that period. According to the IPS report, the disparity is even greater between the world's lowest earners and their CEOs.

It also comes as pay increases are being reduced by even faster rising prices. The median pay for workers did not keep pace with 2021 inflation in 106 of the firms studied by IPS. In fact, 69 of the firms saw a decrease in average nominal worker pay.

The report only looks at inflation in 2021, which is expected to rise by 4.7 %. Prices have only risen in 2022, with only a few workers seeing their wages keep up with skyrocketing costs.

Some politicians have criticized what they consider to be "excessive" CEO pay. Senators Bernie Sanders and Elizabeth Warren, among others, introduced the "Tax Excessive CEO Pay Act" in 2021, aimed at companies with annual revenues of at least $100 million. The bill would levy an additional corporate tax on companies whose CEOs earn at least 50 times the median wage of their employees. Companies with CEOs who earn 500 times more than the average worker, such as the ones IPS studied, would owe an additional 5% in corporate tax.

"CEOs are paid hundreds of times more than their average worker, whose wages haven't changed in years," Ed Markey, a Democrat from Massachusetts who co-sponsored the legislation, said in a press release at the time. "It is a national embarrassment."

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